EV owners jolted by new taxes

As the number of electric vehicles on the roads starts to climb, a number of states are introducing new fees to offset the projected losses in gas-tax revenues.

The AP reports that at least 10 states have considered or passed legislation that would impose such fees on electric or hybrid cars.

The new charges could help governments build and maintain the roads and bridges upon which the new generation of vehicles are being driven. But it seems that owners of gas-free cars are also being eyed to plug holes left in government budgets by the improved efficiency of traditional vehicles.

Gas taxes are one of the main sources of funding for bridges and roads. But people are driving more fuel-efficient cars, and many states’ tax rates haven’t kept up with inflation during the past decade. That’s left less money available for repairs. Nationwide, gas tax revenue declined every year from $40.7 billion in 2004 to $37.9 billion in 2010, according to inflation-adjusted data from the Institute on Taxation and Economic Policy, a research group in Washington.

That’s a big reason Virginia and Washington State are levying green-car taxes and New Jersey, North Carolina, Indiana, and at least four other states are considering doing the same. “The intent is that people who use the roads pay for them,” says Arizona State Senator Steve Farley, a Democrat who wrote a bill to tax electric-car drivers 1¢ for every mile they log on state highways under a yet-to-be-devised tracking system. “Just because we have somebody who is getting out of doing it because they have an alternative form of fuel, that doesn’t mean they shouldn’t pay for the roads.”

Ryan Turner, an IT professional in Chapel Hill, said he and many other drivers of alternative-fuel vehicles chose their cars because they’re concerned about the environment and the country’s dependence on oil. The Chevrolet Volt driver helped advocate for a statewide plug-in vehicle readiness plan.

“On its face, it’s reasonable for electric owners to contribute toward road tax in some way,” he said. “I think what’s suspect is that, given all the issues we have in this state, given the state’s woeful effort so far to promote electric vehicles as part of some statewide agenda, it is suspect that this vehicle tax is a priority given the small amount of the revenue it will bring in.”

The policy looks especially arbitrary when more and more conventional cars are achieving fuel efficiency that’s comparable to some hybrid cars, Turner added.

Jay Friedland, legislative director for the advocacy group Plug In America, has asked legislators in other states to phase in special fees after the number of alternative-fuel vehicles reaches 100,000, arguing administrative costs make such policies counter-productive before states reach a critical mass.

“We generally say this is a period of time when you should be incentivizing these vehicles, but after a while, yes, everyone should be paying their fair share,” he said.

Some states have been mulling taxes based on the number of miles driven each year in each electric or hybrid vehicle. That may seem the fairest way of levying such charges, but it requires government monitoring that many regard as creepy and intrusive. As a result, annual fees are proving more popular with state legislatures.